Valeo : The power of Growth
We reiterate our OW rating with a new €62 PT (vs. €49) and revise our 2017/18 estimates by 11%. Valeo offers best-in-class organic growth thanks to a diversified portfolio and solid positions on automotive megatrends. Book to bill continues to stand at record high levels, and Valeo detailed last week an impressive roadmap for its CDA and Powertrain divisions. We believe one of the highlights of it was the record number of contracts (25) it has secured for its 48V technology. We still see the French supplier as a cyclical automotive company but also believe its 15% EPS CAGR over 2011/2016E deserves to be recognized. We don't apply growth company multiples to Valeo but equally we upgrade our multiples to better reflect this.
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